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Historic Fed Move Cuts Both Ways for Borrowers
Posted by V.K. [Mel] Melhado P.A. on Thursday, January 31st, 2008 at 6:44pm.
Hot on the heels of the Fed’s inter-session rate cut of 75 basis points last week, they cut the rates again today, as they perceive we are most likely on the brink of a recession as they look to stem the tide in the face of a weak economy.
The real beneficiaries from these cuts are mortgage holders whose loans are directly tied to the Prime Rate, as they will see a benefit immediately. HELOCs (Home Equity Lines of Credit), as well of variable rate charge cards will see an interest rate reduction with their next statements.
The interesting thing is that even though long-term rates are at the lowest point in years (2005), it is extremely possible that these rates could actually rise if you look at historical performance and recent trends. The key is that if you are waiting for rates to fall further don’t! Go get your application in now with your bank or mortgage broker to lock in the low rate available.
V.K. [Mel] Melhado PA
Downing-Frye Realty, Inc.
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